On December 18, exactly 47 years after the landmark plenum that launched China’s reform era, Beijing drew a definitive line ...

Abstract: This paper develops a small open economy model in which entrepreneurs partially finance investment using foreign currency–denominated debt subject to an external finance premium. We use ...

We develop and estimate a parsimonious New-Keynesian small open-economy model that incorporates Diagnostic Expectations (DE)—a behavioral alternative to Rational Expectations (RE). Under DE, agents ...